Tuesday, November 25, 2014
With college costs rising to astronomical levels, many parents worry that they won’t be able to sufficiently fund their child’s 529 plan in time to pay the first tuition bill. One strategy that has been gaining popularity is enlisting the help of friends and family.
Each year, you get the “What does Johnny want this holiday?” text messages and try to come up with some sort of toy suggestion. But how many toys does Johnny really need? This is especially true during a baby’s first year of life. Instead of organic onesies, silver teething rings from Tiffany’s or even a $100 check, wouldn’t you prefer a modest contribution to a 529 college savings account? A gift of $100 can grow to $285 over 18 years if invested in a 529 plan that earns a 6% annual return. That’s $285 less that your child would have to borrow to pay for college!
The holiday season will soon be upon us, so there’s no better time to start getting the word out. The first question you’ll likely here is “How do I make a contribution?” As the 529 account owner, you can certainly go around collecting checks from the gift givers and make the deposits yourself, but plans such as the Arizona Family College Savings Program and the CollegeChoice CD College Savings Plan now offer a much easier and effective way.
How Social Gifting Works
Families with 529 accounts managed by College Savings Bank now have an opportunity to make their gift requests go viral through social media. Without having to share any personal account information, Social Gifting allows you to send a message to loved ones via Facebook banner or email that includes a link to a secure webpage where they can make an electronic contribution to a specific 529 account. Parents can choose to create their request from 15 different themed templates, including birthdays, back to school, graduation and holidays.
Once a donation is made, the gift giver is able to print out a gift certificate that they can personally deliver to the child, and a thank you note and confirmation email is automatically generated on behalf of the account owner. Messages can be sent out to friends and relatives throughout the year for various occasions, allowing them to make contributions at their convenience.
Managing Your Gifts
Instead of manually keeping track of and having to deposit paper checks, parents are able to conveniently manage their gifts electronically through their account’s online banking portal. Along with other account records including statements, documents and distributions, you’ll have access to all gifts requests sent and donations received. There’s even an option to mark a request “closed” in case you want to stop receiving gifts for a particular occasion.
Parents can include children in the college savings process by sharing these records so they can watch their gifts grow over time. Studies have shown that children who are part of family discussions on paying for college are more likely to help contribute by saving on their own. Social Gifting is a great way to get everyone involved in making your family’s college dreams a reality.
Ready to Get Started?
To learn more about the benefits of Social Gifting offered through the Arizona Family College Savings Program and the CollegeChoice CD 529 programs, click here.